By Liz DeMera
I’m looking for a Oversold Rally as this 1st chart demonstrates the severe state of oversold that we have now. If were down again tomorrow, it would have a reading of -785 (red line) based on what is dropping off the moving average from 10 days ago.. The blue line is the 30 day which should be reaching a bottom between now and December 2nd as it still has some large numbers to work off.
Secondly, the summation index has slowly been grinding down and finally picked up some speed today. It will need +4300 advancers to halt its slide and that is nearing extreme too. See the Summation Bar Chart Below and the NYSE Summation Index Chart.
Lastly, we did have 193 new lows on NYSE and 132 new lows on Nasdaq which has slowly been increasing every day. Ideally you want less new lows on a lower low in price which would then become a positive divergence. In conclusion, the best case scenario would be a rally that sticks for a day or few days, then comes back down for a retest of the lows or takes out the price low and then we can check for positive divergences in many ways.
This was written by @lizdemera , who uses stock market technical analysis to determine the markets possible future performance.